PISA Financial Literacy results are out and here are the standings (by country):

Yes, there we are at 487, just below average of the 10 OECD countries tested. Note that these scores from the 2015 test (not sure why it takes 2 years to release these results but I digress).

• Have your students complete some of the sample questions from the test.

• Strong linkage between bank accounts and test scores in this summary sheet about U.S. results: “In the United States, 53% of 15-year-old students have a bank account [Table IV.5.8], in line with the relatively wide access to financial products and services in the population more generally (88% of 15-24 year-olds and 94% of 25-64 year-olds have an account at a formal financial institution) [Table IV.3.12]. Students in the United States who hold a bank account score 22 points higher in financial literacy than students who do not, after accounting for socio-economic status [Table IV.5.13]. In the United States, socio-economically advantaged students are about six times more likely than disadvantaged students to hold a bank account [Table IV.5.11].

• Only two states were broken out separately with Massachusetts scoring far above the national average: “The United States collected subnational-level data in financial literacy for two states. The difference in performance between Massachusetts and North Carolina is 28 score points, with Massachusetts scoring above the national average by 36 points [Table IV.4.4].”
  • This would put Massachusetts at a score of 523 (#4 among OECD participants)

• Here’s the data that demonstrates why we need to teach financial education. “Students in U.S. who perform at similar levels in reading and math to their international counterparts perform worse than expected on the financial literacy test: “On average across the participating OECD countries and economies, students perform worse in financial literacy than students around the world who perform similarly in mathematics and reading. This suggests that students could be helped in using the skills widely taught in school to attain higher levels of financial literacy.”

• This is why financial education is a social justice issue; 97 point differential in scores between top and bottom quartiles: “Socio-economically advantaged students (those in the highest 25% of socioeconomic status) score 97 points higher in financial literacy than disadvantaged students (those in the lowest 25% of socio-economic status) (OECD average difference: 89 score points)

As for recommendations, here’s what the PISA policy suggestions were for all countries:

• Address the needs of low-performing students.
• Tackle socio-economic inequalities early on.
• Provide equal opportunities for learning to boys and girls.
• Help students make the most of available learning opportunities at school.
• Target parents at the same time as young people.
• Provide young people with safe opportunities to learn by experience outside of school.
• Evaluate the impact of initiatives in and outside of school.

We look forward to executing on these policy suggestions in the months ahead including demonstrating through rigorous research the dramatic inequity in access to financial education. We also believe that students not only need to make the most of available learning opportunities at school but also need to have MORE opportunities at MORE schools by embedding financial education in more courses (see our recent partnership with DonorsChoose.org as an example).

We must do better! What happened to the national pride of striving to be #1? We at NGPF are committed to a 10 year moon shot to get us back to #1 when it comes to financial education. Why do anything if you are not trying to be the best? Who wants to join the movement?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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